S.E.C. v. CREDIT BANCORP

By Order to Show Cause of July 18, 2000, Carl H. Loewenson, Jr.
(the "Receiver"), seeks an order directing non-party Ameritrade,
Inc. ("Ameritrade") to deliver to the Receiver the 225,000 shares
of Centigram Communications Corporation ("Centigram") common
stock (the "Centrigram Shares") currently held in an account in
the name of Credit Bancorp, Ltd. ("Credit Bancorp") with
Ameritrade which, according to an account statement obtained by
the Receiver, is account number 160-993952. This motion is
opposed by Ameritrade. By Notice of Motion dated July 20, 2000,
Ameritrade seeks an order permitting it to intervene in this
action and for relief from this Court's November 23, 1999 asset
freeze order (the "Asset Freeze Order"). The Receiver does not
oppose intervention by Ameritrade in this action but does oppose
the request for relief from the Asset Freeze Order. For the
reasons set forth below, the motion by the Receiver is granted
and the motion by Ameritrade is granted in part and denied in
part.

Facts and Prior Proceedings

The following facts are gleaned from the submissions by the
parties. They are either undisputed or presumed true for purposes
of the instant proceeding.*fn1

On June 14, 2000, this Court approved an agreement between
Centigram and the Receiver pursuant to which the Receiver is to
deliver 900,000 shares of Centigram stock to Centigram in
exchange for a payment of $12,095,325 from Centigram to the
receivership estate, as well as other consideration. The
agreement requires the Receiver to "use all commercially
reasonable efforts to deliver" the 900,000 shares to Centigram.

The Centigram shares are treasury shares which are to be
returned to Centigram to facilitate the purchase of Centigram by
a corporate suitor. The closing of that transaction is scheduled
for July 27, 2000. Therefore, the Receiver must deliver the
Centigram shares by that date.

The 900,000 Centigram shares had been maintained by Credit
Bancorp in four separate brokerage accounts, including 225,000
shares in the Ameritrade Account. The three brokerage firms other
than Ameritrade have delivered the Centigram shares held with
them to the Receiver. Ameritrade, however, has refused to turn
over the Centigram Shares held in the Ameritrade Account.

The Ameritrade Account carries a margin balance of $3.434,167.
The total value of the securities in the Ameritrade Account after
removing the Centigram shares is $11,804,655, of which
$10,531,500 consists of 500,000 shares in Vintage Petroleum, Inc.
("Vintage Petroleum") common stock and $1,273,155 consists of
shares in other companies. Thus, the equity in the account, i.e.,
its total market value minus margin debt, is approximately 70% of
the total market value of the account.

Consistent with the prevailing practices in the brokerage
industry, Ameritrade ordinarily requires that the equity in a
margin account not fall below 30% of the total market value of
that account. However, pursuant to the terms and conditions of
the margin agreement with Credit Bancorp, Ameritrade has the
right to unilaterally increase the required level of equity.

After receiving submissions from the Receiver and Ameritrade,
these matters were deemed fully submitted on July 21, 2000.

Discussion

I. The Motion By Ameritrade

A. Permissive Intervention Will Be Granted

Ameritrade seeks to intervene in this action in order to
protect its alleged security interest in stock held in the
Ameritrade Account. The Receiver does not oppose intervention by
Ameritrade. The Receiver also represents to the Court that the
Securities and Exchange Commission ("SEC") is not opposed to such
intervention. Ameritrade seeks intervention as of right under
Federal Rule of Civil Procedure 24(a). Intervention as of right
is not appropriate. However, pursuant to this Court's broad
discretion to allow permissive intervention ...

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